>> What in your opinion is the best templating system to use when creating a website?
It really depends on the application and the developer. There are many different types of templating systems out there, using Smarty [smarty.php.net] is just one of them. For simple applications I just include the header, content, and footer and it works just as well as any other system, plus it's simple enough.
There is an extension for Dreamweaver that will allow you to edit smarty templates. A web search for "smarty template dreamweaver extension" should get you started on the right path.
What in your opinion is the best templating system to use when creating a website?
From a developers standpoint, I would say the best templating system is the one that I develop myself because I will know exactly how the template system works. However, since I don't really want to reinvent the wheel, I would say that the best templating system is the one that meets all of my needs with the least amount of overhead.